AKTS: Q4 2016 Results Show Continued Progress Toward Commercialization
By Lisa Thompson
Akoustis (AKTS) released its March 31, 2016 10K with results being in line with forecasts. The company ended the year having lost $3.7 million or $0.32 per share. EBITDA was a loss of $3,041,000. It will remain in a loss position for at least the next year or two as it is only scheduled to start generating revenues some time in the second half of FY 2017. The company exited the March year with $2.7 million in cash, but since then has raised more money and reported having $4.3 million in cash as of June 27, 2016, which (in combination from future grant money already awarded) it believes is sufficient to support plans for the next 12 months.
In those twelve months there are plans to increase the employee count to between 20 and 25 people and to spend $650,000 on capex. The company hopes to pay for some of that equipment with government grants. Its enterprise value is now $58 million.
In Q4 the company lost $749,000 or $0.05 per share. EBITDA was a loss of $406,000. This was sequentially a reduction in the loss of $1,017,000 in Q3 primarily due to grant money of $234,000 applied in the quarter.
During the year the company achieved two milestones in its development agreement with its foundry partner. Milestone 1 (Manufacturing Partner Gap Analysis) was to validate that required materials, people, process and equipment are present for volume manufacturing and Milestone 2 (Process Transfer to Foundry Partner), to design of filters, technology transfer and fabrication on GCS’s high- volume manufacturing equipment, fully tested wafers, and delivery of prototypes.
The company is in the process of Milestone 3 (Complete Filter Process Capability)—Update design with process feedback, fabricate multiple wafers using the approved manufacturing process flow, fully tested wafers, calculated yield and delivery of initial product which is expected to be completed in the second half of 2016. The next milestone are: Milestone 4 (Production-Ready Filter Design)—Filter design complete and manufacturing process locked and Milestone 5 (Product packaging and ramp)—Product fully packaged and ready for production, focus shift to revenue generation from filter sales. These two are targeted for completion by the first half of 2017.
Akoustis stock is a way for public company investors to participate in a technology start-up venture that could grow into a major player, or be an attractive acquisition for a large RF filter or semiconductor manufacturer selling to the smartphone market that would like a proprietary BAW solution. The company’s current enterprise value is $58 million and we believe it should be able to capture significant market share in the multi-billion dollar high growth BAW filter market it is entering.